Senator Shelby: No Derivatives for Subsidized Banks

The key Republican negotiator on financial reform doesn’t expect a deal before this afternoon’s test vote.  But in my interview on GMA, Senator Shelby did seem to back new Democratic efforts to crack down on derivative trades by the big Wall Street banks.

“When they use other people’s money and especially when they rely on the taxpayer to do this kind of risk taking, if something goes wrong they can take the whole system down.  We don’t need this.  We’ve been there 18 months ago let’s make sure we don’t ever go back and visit the taxpayer again…If they want to trade with their own money, they’re own resources is one thing, but to trade with the idea of highly leveraged positions hoping that the taxpayer will bail them out, or believing they’ll bail them out, that’s wrong.  It’s a mistake and we’re gonna end that."

Watch the whole interview here